Minus a huge onetime cost, CVS Health beats expectations in 2nd quarter

Minus a huge onetime cost, CVS Health beats expectations in 2nd quarter

CVS Health detailed a better-than-expected second quarter Wednesday, then reassured investors that it doesn't depend heavily on much-criticized prescription-drug rebates that regulators may eliminate.

In the second quarter, CVS Health actually lost $2.56 billion, due to a hefty charge from its long-term-care business.

But adjusted earnings, which don't count such onetime items, came in at $1.69 per share. Revenue rose 2 percent to about $46.7 billion. Both figures beat expectations.

Analysts predicted earnings of $1.61 per share on $46.32 billion in revenue, according to FactSet.

The company booked a $3.9 billion charge in the quarter tied to its long-term-care business. It said Wednesday that it has struggled to grow that business after spending more than $10 billion a few years ago to buy Omnicare, which provides pharmacy services to nursing homes and other clients.

That charge and some costs tied to a pending $69 billion acquisition of the health insurer Aetna led to the quarterly loss.

Overall, though, the company had a good quarter, Edward Jones analyst John Boylan said in another research note. He added that the Omnicare charge was a surprise, but he was already expecting modest results from that business.

For 2018, the company now expects to earn between $6.98 and $7.08 per share this year, better than the per-share projection of between $6.87 and $7.08 that the company put out in May.

Analysts expect, on average, earnings of $6.97 per share.

Regulators are still reviewing the Aetna deal, but CVS Health said it expected to close that transaction either late in the third quarter or early in the fourth.

Company executives have said they want to use the combination to move deeper into managing customer health and to expand the care CVS provides through all of its retail locations.

Shares of CVS Health Corp., which is based in Woonsocket, Rhode Island, climbed 4 percent to $68.04 Wednesday afternoon, while broader indexes were mixed. The stock is still down about 6 percent so far this year.

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